This case study document outlines NatureView Farm's goal to grow its revenues by over 50% within 23 months in order to attract new investors or an acquisition. It provides an overview of the company's history and the organic food market trends. It then analyzes 3 options to expand NatureView's product lines and distribution channels: 1) expanding 8-oz cups into supermarkets, 2) expanding 32-oz cups nationally, or 3) expanding children's multipacks in natural food stores. Financial projections are presented for each option, with the recommendation being to expand the multipacks into supermarkets in the Northeast and West to minimize channel conflicts and attract new customers.

1. CASE STUDY
Harward
Business
School
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2. NatureView
Farm

3. Hello!I am Ayush Gupta
I am here to deliver a presentation on
Natureview Farm
You can find me at linkedin @Ayush Gupta
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4. Agenda 1 Overview
- Company
- Natural/Organic market trends
- Challenges
 Strategies
- Option 1
- Option 2
- Option 3
 Finance and accounting
 Recommendation

5. Early Days 1
1989
• Company was founded in Vermont
• First entered with 8-oz and 32-oz with plain and
vanilla flavour
1999
• Company revenue growth from $ 100,000 to $13
million
• Fruit on the bottom yogurt
2000
• Expand to 12 yogurt flavors & multipack yogurt
(for children)

6. Natural/Organic market
trends
1
 Organic foods market predicted to grow from $6.5 billion
to $13.3 billion over 4 years.
 Generally organic products customers tend to be more
educated, earn higher incomes, be older and live in the
Northeast and West.
44% of consumers would like a wider selection of organic
products in supermarkets.
 Supermarkets are moving toward attracting new
customers by offering more organic products.

7. “ I like to eat yogurt in the
morning. It's easy and quick and
available anywhere.
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8. Yogurt Market Trends 1
 Concentrated- 4 competitors control over 50% share
 Supermarkets= 97% of total sales (3% annual growth).
 Natural Food Stores= 3% total sales (20% annual growth)
 Factors in purchasing decisions: - Package type/size, flavor, price,
freshness, ingredients, Organic

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10. NatureView Farm Goal
Goal - Attain highest possible valuation in order to secure new
investors or position itself for acquisition.
Challenge - Identify path to grow revenues by over 50% within 23
months.
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11. Natureview Farms used
sales brokers to sell their
yogurt to both natural foods
and supermarket chains.
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12. 12
Market Share By Packaging
8-oz cup smaller
Children's
mutipacks
32-oz cups
Others
9%
74%
8%
9%

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Market Share By Brand
Yoplait
Dannon
Columbo
Private Label
Others
23%
33%
15%
5%
24 %

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Market Trend - Growth
0
2
4
6
8
10
12
14
Growth
8-oz cups
Childrens
Multipacks
32 - oz Cups

15. SWOT Analysis
STRENGTHS II WEAKNESSES II OPPORTUNITIES II THREATS
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16. 16
SWOT Analysis
STRENGTHS:
No artificial, natural ingredients
Market leader with 24% share in Natural
Foods
Highest shelf-life products
Strong Channel Partner Relationships
WEAKNESSES:
Highly dependent on brokers
Only in natural food channel/not
supermarket
Still a small share in the full yogurt
market
OPPORTUNITIES:
12.5% growth rate with multi-
packaged products for children
Supermarket channel
THREATS:
Not sufficient capital and financing
options
No experience with supermarket
channel

17. Yogurt Production Costs and
Retail Prices by Channel
Natural Food
Channel
Supermarket Food
Channel
Manufacturing Cost
8-oz. cup $ 0.88 $ 0.74 $ 0.31
32-oz. cup $ 3.19 $ 2.70 $ 0.99
Orange $ 3.35 $ 2.85 $ 1.15
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18. Which option to choose?
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19. OPTION 1 –
Expand 6 SKUs of the 8-oz into eastern and western
supermarket regions
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YAAY
• 8-oz cups represent
largest dollar and unit
share of market.
• Supermarkets fear
losing market share to
natural food competitors.
• First mover advantage
STOP
• High risk & high cost
(marketing)
• Highest level of
competitive trade
promotion and marketing
spend.
• Possible channel conflict
between supermarkets
and natural food stores.

20. 20
8-oz Cup (Channel) PRICE ($)
Sales Price (Supermarket Channel) 0.74
Retailer margin (27%) 0.20
Price after retailer margin 0.54
Distributor margin (15%) 0.08
Final sales price for NatureView 0.46
Expand 6 SKUs of the 8-oz into eastern and
western supermarket regions

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Projection Income Statement
2000 (Price $) 2001 (Price $)
Unit sales 35,000,000 35,000,000*(1.2) = 42,000,000
Total Revenue 35,000,000*$0.46 = $16,100,000 42,000,000*$0.46 = $19,320,000
Total Cost 35,000,000*$0.31 = $10,850,000 42,000,000*$0.31 = $13,020,000
Gross Profit $5,250,000 $6,300,000
Expenses
Advertisement 1,200,000*2 Regions = $2,400,000 $2,400,000
SG&A $320,000 $640,000
Broker Fee (4%) 16,100,000*4% = $644,000 19,320,000*4% = $772,800
Slotting Fee 10,000*6*20 retails = $1,200,000 ----
Net Income $ 686,000 $2,487,000

22. OPTION 2 –
Expand 6 SKUs of the 8-oz into eastern and western
supermarket regions
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YAAY
• 32oz cups generate an
above average gross
profit margin.
• Fewer competitive
offering in this size.
• Lower promotional
expense than Option 1.
STOP
• Higher slotting fees due
to national distribution.
• National distribution will
be challenging within 12
months.
• Possible channel conflict
between supermarkets
and natural food stores.

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32-oz Cup (Channel) PRICE ($)
Sales Price (Supermarket Channel) 2.70
Retailer margin (27%) 0.73
Price after retailer margin 1.97
Distributor margin (15%) 0.30
Final sales price for NatureView 1.67
Expand 4 SKUs of the 32oz product line
nationallY

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Projection Income Statement
2000 (Price $) 2001 (Price $)
Unit sales 5,500,000 5,500,000
Total Revenue 5,500,000*$1.67 = $9,185,000 $9,185,000
Total Cost 5,500,000*$0.99 = $5,445,00 $5,445,000
Gross Profit $3,740,000 $3,740,000
Expenses
Advertisement 1,200,000*4 Regions = $480,000 $480,000
SG&A $160,000 $160,000
Broker Fee (4%) 9,185,000*4% = $367,400 $367,400
Slotting Fee 10,000*4*64 retails = $2,560,000 ----
Net Income $172,600 $2,572,600

25. OPTION 3 –
Expand 6 SKUs of the 8-oz into eastern and western
supermarket regions
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YAAY
• NatureView has strong
relationship with
leading natural food
channel retailers.
• Financially attractive.
• More time to prepare
the company for
moving into
supermarket channel.
STOP
• Fast growth of natural
food channel will lead
to demands equal to
those of supermarkets.
• Miss opportunity to
enter supermarket
channel before
competitors.

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8-oz Cup (Channel) PRICE ($)
Sales Price (Supermarket Channel) 3.35
Retailer margin (35%) 1.17
Price after retailer margin 2.18
Distributor margin (9%) 0.20
price to wholesaler 1.98
Wholeseller Margin (7%) 0.14
Final sales price for Nature View $ 1.84
Expand 2 SKUs of the children’s multi pack into
the natural food channel

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Projection Income Statement
2000 (Price $) 2001 (Price $)
Unit sales 1,800,000 1,800,000*(1.15) = 2,070,000
Total Revenue 1,800,000*$1.84 = $3,312,000 2,070,000*$1.84 = $3,808,800
Total Cost 1,800,000*$1.15 = $2,070,000 2,070,000*$1.15 = $2,380,500
Gross Profit $1,242,000 $1,428,300
Expenses
Advertisement $250,000 $250,000
SG&A --- ---
Broker Fee (4%) 16,100,000*4% = $644,000 19,320,000*4% = $772,800
Comp case (2.5%) 3,312,000*2.% = $82,800 3,808,800*2.5% = $95,220
Net Income $909,200 $1,083,080

28. Decision
Recommending Nature
view to expand the multi
pack into supermarket
channel in Northeast and
West
● High growth
● Minimized channels conflicts
● New Targeted customers
●Higher Investor confidence
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29. 20,000,000+Whoa! That’s a big number, aren’t you proud?
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Projected Growth by 2001

30. Let’s review some concepts
What is NatureView
and Brief company
Background and key
personnel
How to increase sales
and revenue • Survey
exhibits & factors
affecting yogurt choice
The core difference
between -
Supermarket Channels
vs. Natural Channels
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Analysis of three
proposed options to
achieve $20 million
target.
The
Financial and
accounting balance
sheet
And
Final DECISION
To achieve the
recommended target

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Thanks!
Any questions?

32. DISCLAIMER
Created by AYUSH GUPTA, VIT Vellore, during
Marketing Management Internship under Prof.
Sameer Mathur
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